U.S. District Court Forums for Patent Litigation: How Plaintiffs Choose and Defendants Move (Part 1 of 2)

09 December 2009 Publication

Article

By Mary Calkins, Foley & Lardner LLP   

This article is part of our Winter 2009 edition of Legal News: China Quarterly Newsletter, Eye on China.

Most U.S. patent actions take place in one of the many U.S. district courts — that is, federal as opposed to state courts. Every state has at least one district court, and many have more than one. Understanding the advantages and disadvantages of particular district courts and how to potentially transfer a case or party from one court to another are important strategic aspects of patent litigation. This article provides a brief overview of how plaintiffs select a district court in which to bring a patent action. (Part 2 of this article will appear in the upcoming winter issue of the Eye on China newsletter and explore how defendants might deal with the situation of being sued in an inconvenient court.)

When You Are the Plaintiff: Choosing Where to Sue

The plaintiff in a patent action has the right to select a district court in which to file the initial complaint and begin the action. In choosing a court, the following factors are often considered.

Does jurisdiction exist over the planned defendants?

In order to bring a lawsuit in a particular district court, that court must have both “subject matter jurisdiction” over the issues in the litigation and “personal jurisdiction” over the defendants in the litigation as well as proper venue. Under 28 U.S.C. §§ 1331 and 1338, all U.S. district courts have subject matter jurisdiction over actions arising under U.S. patent laws. The Federal Circuit has further clarified that for corporate defendants, venue in a patent case generally exists wherever personal jurisdiction exists (VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583-84 (Fed. Cir. 1990)). Therefore, the jurisdiction inquiry tends to focus on whether personal jurisdiction exists over the defendants.

Although the legal analysis of this issue varies slightly depending on the law of the state in which the court is located (forum state), courts usually follow the test first established by the U.S. Supreme Court in International Shoe Co. v. Washington (Int’l Shoe Co. v. Washington, 326 U.S. 310, 316-17 (1945)), which held that personal jurisdiction exists over a corporation if it has sufficient “minimum contacts” with a forum state to reasonably anticipate being sued there.

The minimum contacts considered usually include whether the defendant operates a place of business in the state; whether the defendant’s products are sold or advertised there; and whether the defendant negotiated or entered into contracts there. A small number of contacts with the state might be enough to support personal jurisdiction if those contacts are strongly related to the acts alleged in the lawsuit. On the other hand, if the contacts do not specifically relate to the allegations, but just show a general pattern of doing business in the state, then a larger number or more regular pattern of contacts might be needed to support personal jurisdiction (See, for example, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984)). Because defendants often challenge personal jurisdiction, the plaintiff must be able to prove that such jurisdiction exists over each defendant in the state in which the action is brought.  

How many patent cases does the district court normally handle, and how quickly does it handle them?

Personal jurisdiction over a defendant often exists in more than one state, so a plaintiff may still have a choice of several district courts. The next factors to consider are the court’s experience with patent cases and its speed in handling them.

A few district courts, including those located in Delaware, California, and the Eastern District of Texas, tend to handle large numbers of patent cases, while many other district courts handle relatively few. The advantages of bringing suit in a court that hears many patent cases include experienced judges, more case precedent on patent issues, and, in many districts, special “local patent rules” for patent cases. Judges that have experience with patent law and technology allow attorneys to spend less time and money “educating the court” about the case. Moreover, a large body of past patent opinions provides insight into how the judges might rule. Local patent rules help to set a schedule for the major activities in the case such as claim construction. These rules make it easier to plan litigation schedules and budgets, and help parties efficiently assess and develop their strategies. 

Another factor to consider is the speed with which the district court moves its cases along. Some district courts, known as “rocket dockets,” are well known for handling cases quickly. Other courts may operate more slowly because they are overloaded with cases, perhaps due to a judge’s recent retirement or the court’s past popularity with plaintiffs. A rocket docket may be a good choice for a case when a plaintiff wishes to obtain a quick decision. A slower court might be better if a plaintiff wishes to file suit and then have time to discuss a settlement with the defendants before the real litigation work begins. 

What types of decisions has the court made in past patent actions?

Reviewing a court’s past patent case decisions, either through case research or by checking metrics compiled by past researchers, also may be helpful in determining whether a court will respond positively to your planned litigation strategy. For example, the Eastern District of Texas has issued many decisions favorable to patent holders. In some cases, it is helpful to consider the records of individual judges to assess the chances of a particular outcome, although a plaintiff cannot be certain which judge will be assigned to the case until after the district court is selected and the complaint is filed. 

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